Reference no: EM132293759
Discussion Questions: 1. Should auditors conceal materiality levels from audit clients?
2. My question to all of you is: at what point do we say the information should not be disclosed? How serious does the harm need to be before we allow the auditor to disclose confidential information? You have to remember disclosing confidential information will almost always harm the client who conveyed the information to you. Should ethics rules require a weighing of harm by auditors between harm to the client v. harm to an outside party?
3. Hello class. Dhiaa provides some good basic information about why the accuracy of audits is so important. It is, oftentimes, a credibility issue. I don't know about the rest of you, but my first experience with learning about audits was watching competitions on television. I remember watching the Miss America pageant one year and just before they announced the winner (which never came from my state J), the MC's would receive an envelope and say that the results had been audited by the X accounting firm, usually one of the Big Five accounting firms. It is interesting to me that, even in these settings, the information needs audit review. Why is this the case?
We've talked about many of these reasons already during prior weeks. One, for example, would be that an audit increases the credibility of the information. It makes us trust it more. What else does it do? Why would it be so important that simple information, such as who the winner of a pageant is, would need audit review?
4. So, in your mind, what factors should impact materiality? I'm not talking about what does impact materiality, but what you think should impact materiality. Remember, the key is how the audit will impact the accuracy of the information provided to stakeholders. Please explain why the factors you chose would be important information for stakeholders.
5. What ethical responsibilities does an auditor have that are different than the ethical responsibilities that a traditional accountant has? How can performance of these responsibilities ensure the accuracy of financial statements?
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